See you in court!

If Council passes the resolution to place a measure “confirming” the Rent Stabilization Act on the November ballot, it will have taken the first step toward ending up where the Council members invariably swear they never want to go:  in court.

What is more, the issue to be litigated will have nothing to do with the legality of rent control.  Instead, the case will focus on the legitimacy of the procedure that Council, at staff’s recommendation, has chosen to use to defend the ordinance.

And if this happens, Council will have no one to blame but itself – and the City Attorney.

We’ll start with the most basic question:  Does Council have the legal authority to place the measure on the ballot in the first place?

The resolution drafted by the City Attorney states that Council is submitting the ballot measure “pursuant to Elections Code section 9222.”

That section reads, in relevant part, as follows:

The legislative body of the city may submit to the voters, without a petition therefor, a proposition for the repeal, amendment, or enactment of any ordinance, to be voted upon at any succeeding regular or special city election, and if the proposition submitted receives a majority of the votes cast on it at the election, the ordinance shall be repealed, amended, or enacted accordingly.

(emphasis supplied).

The problem is, the ballot measure Council wants to place on the ballot does not fit within any of the three bold-faced categories:  It surely does not “repeal” the Rent Stabilization Act.  It does not “amend” the Rent Stabilization Act – Exhibit A to the resolution sets forth the full text of the ordinance adopted by Council in haec verba.  And it does not “enact” the Rent Stabilization Act – Council already did that on March 1, when it passed the ordinance on its second reading.

Instead, the stated purpose of the ballot measure is for voters to “confirm” the ordinance previously adopted by Council.  We suppose that one could argue that “confirming” an existing law is no different than “enacting” a new one – but we’re not sure a judge would agree.  It is a basic principle of statutory construction that the words of a statute like Elections Code section 9222 are to be given their “plain meaning.”  And there is no dictionary, legal or otherwise, that defines “confirm” as synonymous with “enact.”

Or at least a suit challenging the ballot measure, if it passes, could reasonably contend.  We would have a lot more confidence about the validity of the measure if judicial precedent existed approving the procedure of asking voters to “confirm” an ordinance previously enacted by a city council.  But our LEXIS search yielded no such cases.  We might even take comfort if we knew that other California cities had done the same thing and gotten away with it.  But our Google search came up empty.

(In case you were wondering, we don’t think the city Charter would help the City’s defense.  Although the resolution does not cite the Charter as enabling authority, section 3-3 of the Charter states that, “The Council may, on its own motion, submit to the electorate by initiative or referendum any proposed resolution or ordinance which could be enacted by the Council.”  But this provision can be read to authorize the ballot measure drafted by the City Attorney only if you strike the word “proposed” and replace “could be” with “has been.”  And most judges aren’t willing to rewrite the law – especially a “constitution” like a city charter – in such a fashion.)

Okay, now assume that Council does have the legal authority to place the measure on the ballot.  Let’s explore the possible outcomes – and the potential legal challenges.

If Council accepts staff’s recommendation on Monday night, there will be two rent-related measures on the November ballot:  the Council-sponsored measure to “confirm” the Rent Stabilization Act and the initiative backed by the Alameda Renters Coalition to amend the city Charter.  If either of the two measures pass, and the other doesn’t, there should be no problem.

Should the voters approve the Council-sponsored ballot measure and turn down the ARC initiative, the Rent Stabilization Act will stay on the books (with whatever benefit “confirmation” confers).  By the same token, should the voters do the opposite, the Charter will be amended to make rent control and just-cause eviction the law in Alameda.  In that event, since an ordinance is invalid if it conflicts with the charter, the Rent Stabilization Act will bite the dust.

The difficulty arises if both measures win – or if both lose.

Take the latter scenario first.  If both the Council-sponsored ballot measure and the ARC initiative are defeated, the City Attorney undoubtedly would contend that the Rent Stabilization Act remains in effect.  After all, the initiative that sought to replace the ordinance failed.  But wait a minute:  under this scenario, the ballot measure that sought to “confirm” the ordinance also failed.  Go back to the dictionary:  one of the antonyms for “confirm” is “reject.”  If a majority votes against “confirming” the Rent Stabilization Act, hasn’t the electorate effectively “rejected” the Act?  If so, how can Council continue to enforce the ordinance?

We can’t predict how a court would rule on this argument.  But we do know that, by placing a measure on the ballot to “confirm” the Rent Stabilization Act, Council will be creating the risk of a negative vote whose legal consequences are unknown.  If the measure loses and an action for injunctive relief is brought against the City, the wound will be self-inflicted.

Now let’s suppose that both the Council-sponsored ballot measure and the ARC initiative pass.  In that case, we almost can guarantee that, because of the way the City Attorney has written the measure, a lawsuit will follow.

The California Supreme Court has laid down the basic rules governing the case where two ballot measures addressing the same subject both pass at the same election.  If the two successful measures are “competing” or “conflicting,” only the provisions of the measure receiving the higher number of affirmative votes become operative.  None of the provisions in the other measure takes effect.  By contrast, where the two successful measures are “complementary” or “supplementary,” they are compared provision-by-provision.  If a conflict exists on any particular item, the provision in the measure with the higher vote total prevails.  But for items where there is no conflict, the provisions in the measure with the lower vote total are enforceable as well.

The characterization of two ballot measures as “competing” or “complementary” depends on whether they represent alternative ways to establish a “comprehensive regulatory scheme.”  (Think:  campaign finance reform).  If they do, the “all or nothing” rule applies:  all of the provisions of the top vote-getter – and none of those of the second-place finisher – go into force.  If they don’t, the provision-by-provision process is used to amalgamate the two measures.

The Rent Stabilization Act and the ARC initiative fit the description of “competing” measures to a tee, since they set up alternative – and conflicting – regimes for regulating rent increases and evictions.  The former does not impose a cap on rent increases; the latter does.  The former permits “no-cause” evictions; the latter does not.  So if the basic rules decreed by the California Supreme Court are followed, the ARC initiative would take effect, in its entirety, if it got more votes than the Council-sponsored ballot measure, and vice versa.

But that’s not how the City Attorney has written the ballot measure.  Instead, for the case where both measures pass, the drafters have picked the “all or nothing” rule to govern when the Council-sponsored measure gets more votes, and the “provision-by-provision” rule to govern when the ARC initiative gets more votes.  If the ARC initiative finishes second to the Council-sponsored measure, the initiative is deemed “null and void in [its] entirety and without any legal effect.”  But if the ARC initiative is the top vote-getter, only those provisions of the initiative “that are in direct and irreconcilable conflict” with the provisions of the Rent Stabilization Act become law, “and all other provisions of this City Council sponsored measure shall become valid and binding.”

The phrase “Heads I win, tails you lose” may come to mind.

How can this outcome be justified in light of the rules stated by the Supreme Court?  Well, because it’s what the voters “intended.”  If you don’t believe us, just look at section 5 of the ballot measure:  After setting forth the scheme described above, it states, “The voters expressly declare this to be their intent, regardless of any contrary language in any other ballot measure or measures.”

Here’s the game the City Attorney is playing:  When the Supreme Court first pronounced the rules for deciding between two successful ballot measures addressing the same subject, it created a loophole.  These rules apply, the Court stated, “unless a contrary intent is apparent in the ballot measures.”  Aha, the clever drafter will say:  All I need to do to stand the usual rules on their head is to stick in a sentence stating that this is what the voters intended!

We can see the litigators lining up on the courthouse steps already.

If both measures pass and the Council-sponsored ballot measure gets more votes than the ARC initiative, the renters’ legal team would challenge application of the “all-or-nothing” rule on the grounds that it’s inappropriate in a case where one competing measure – the ARC initiative – is a Charter amendment and the other – the Council-sponsored measure – merely “confirms” an existing ordinance.

Remember, ordinances are invalid if they conflict with the charter.  If the ARC initiative amending the Charter were the only measure on the ballot and it passed, Council could not invalidate it by later adopting a conflicting ordinance.  The result should be no different, the renters’ lawyers would argue, simply because the conflicting ordinance was placed on the ballot and passed – by whatever margin – at the same election.  Charter amendments always win.

By the same token, if both measures pass and the ARC initiative gets more votes than the Council-sponsored ballot measure, the grounds for a legal challenge to use of the “provision by provision” process would be even stronger.  Surely, the City would concede that the two measures are “competing” and not “complementary.”  In such a case, the renters’ advocates would argue, all of the ARC initiative, and none of the Rent Stabilization Act, should go into effect.  That’s what the Supreme Court’s rules say.

And the renters’ barristers would object mightily to employing any fiction about “voter intent” to justify deviating from the usual rules.  The City claims that a single sentence in the Council-sponsored ballot measure suffices to show that the voters intended that the “Heads I win, tails you lose” scheme should be used.  But consider this sentence from the ARC initiative:  “This Charter Amendment shall supersede any ordinance passed by the Alameda City Council covering the area of rents or evictions.”  If the ARC initiative gets more votes than the Council-sponsored ballot measure, why isn’t this sentence the definitive declaration of “voter intent”?

But even if the City wins the interpretation battle, the lawsuit won’t be over.  Under the “provision-by-provision” process, someone has got to determine which provisions of the ARC initiative “are in direct and irreconcilable conflict” with the Rent Stabilization Act and which are not.  Who’s going to do this?  The City Attorney?  Council itself?  No, it will have to be a judge.

Again, we’re reluctant to predict how a court would rule on any of these legal issues, and we found no cases in which an appellate court considered anything like section 5 of the ballot measure drafted by the City Attorney.  But it is precisely the absence of direct precedent that makes us so confident that litigation will ensue if the measure passes.  When the issue is one of “first impression,” the temptation becomes overwhelming to file suit and see what a Superior Court judge will say.  And if the legal challenge fails at the trial-court level, there is always the First District Court of Appeals, and maybe even the California Supreme Court.

Indeed, having gone through this analysis, we’re almost ready to consider changing our area of specialization.  By placing the measure on the ballot, Council will have created work for state-court litigators for years to come.  So, from a personal perspective, we take our hat off to Ms. Kern and her staff.

Somehow, though, we doubt that our notoriously litigation-averse Council members will join in the applause.  They can choose to put the measure drafted by the City Attorney on the ballot to show their support for the rent stabilization ordinance they previously passed.  But if they do, they should make sure that future city budgets contain a hefty line item for outside counsel expense.

Sources:

ARC initiative: ARC ballot measure

Rent Stabilization Act: City rent stabilization ordinance

Resolution placing Council-sponsored measure on ballot: 2016-08-08 Ex. 1 to staff report – Resolution (2)

Taxpayers to Limit Campaign Spending v. Fair Pol. Practices Com., 51 Cal.3d 744 (1990): Taxpayers to Limit Campaign Spending v. Fair Pol. Pract

Yoshisato v. Superior Court, 2 Cal.4th 978 (1992): Yoshisato v. Superior Court_ 2 Cal. 4th 978

About Robert Sullwold

Partner, Sullwold & Hughes Specializes in investment litigation
This entry was posted in City Council, Housing and tagged , , , . Bookmark the permalink.

12 Responses to See you in court!

  1. nyborn2013 says:

    “Rent Stabilization or non rent stabilization. That is the question.” “Ask not what rent stabilization can do for you, ask what you can do for stabilization.” “May the wind always be at your back and the sun upon your face. And may the winds of rent stabilization carry you aloft to dance with the stars.” “All the world’s a stage, and all the council members merely players.” As the chapters are written for rent stabilization, may renters be protected, as well as “local” landlords.

  2. wordist45 says:

    Bravo! Excellent work, Mr. Sullwold.

    But isn’t there another option? Assuming ARC doesn’t relish the prospect and political satisfaction of beating the pants off the City’s Ordinance in the polls, couldn’t ARC file a motion for stay, preventing the City from placing it on the ballot on the basis of the limitation you have cited concerning Elections Code section 9222, to wit, “confirming” is not permitted?

  3. dave says:

    What about the legality of rolling back rents to May ’15 levels? That abrogates thousands of legal contracts. Does a city have that power?

    It would be surprising is there wasn’t a lawsuit over that.

  4. MP says:

    I’m not sure whether or not putting the City ordinance on the ballot is the wisest political means of defending the ordinance, but I do understand the logic of giving voters the option of affirmatively voting for something that is either acceptable to them or at least preferable to the ARC permanent charter amendment. Who knows how voters are influenced, but the ARC may prefer this election to present a stark choice between rent control and not rent control. (I remember one of their allies, Tenants Together, telling the City Council not to implement what became the City’s current rent control ordinance, on the ground that neither “side” liked it.) Without an alternative, less drastic form of rent control on the ballot, it is perhaps easier to frame the election that way, although the reality is that rent control is already the law in Alameda and will be the day after the election no matter how the vote plays out.

    As far as interpreting conflicting “voter intent” between a (probably unlikely) majority plus one in favor of the ARC initiative and a majority plus more in favor of the City Council measure, I would say that “voter intent” favored the City Ordinance being the law and that the ARC initiative has no effect. That is apparently what the City Council measure say will say and if it gets more votes, I would assume that is what the voters intend. The City might have considered also adding a short charter provision expressly giving the City Council authority in this subject matter to avoid the legal implications of one measure being labeled an ordinance and other a charter amendment. (Question: Notwithstanding the language about the Council measure prevailing in all respects over the ARC measure if the Council measure receives more votes (where both get at least a majority), is the City Council measure otherwise identical in all respects to the current ordinance or does it make some change, such as duration or sunsetting? If so, isn’t the Elections Code section satisfied?)

    I also think you get into trouble trying to figure out what voter intent is with respect to the effect of one measure getting more votes than the other, except by looking at what both measures say what that effect should be. If you go beyond what the texts of the ballot measures say in order to try to figure out what “voter intent” is, you start getting into all sorts of speculation (Not that a potential judge in potential litigation wouldn’t do just that). In theory you could have voters vote for both measures hoping that at least one of them passes. One voter might prefer the City measure — in all respects – over the ARC measure, and prefer both over what the law was in Alameda before the City enacted its rent control ordinances. That person might fear, however, that if both the City measure and the ARC measure fails, this would be seen as an expression that no form of rent control should be in place, and so votes for both hoping that one of them prevails, albeit with the hope that the City Council measure gets more votes. If the Council measure gets more votes, that person is happy. Another voter may like some parts of one plan and other parts of the other and so votes for both. Another person may vote for both hoping that the ARC measure prevails in all respects, but also votes for the City Council measure for the same reason that the first person did, in order to avoid a result that looks like a rejection of rent control altogether. That person hopes the ARC measure gets a majority and more votes than the Council measure, however, that person is not terribly disappointed if both the City measure and the ARC measure “pass” but the City Council measure gets more votes, but might wish that he or she didn’t cast the insurance vote for the City Council measure. That same person might be glad he or she made an insurance vote for the City Council measure if the ARC measure fails to get a simple majority but the City Council measure does.

    All that said, it seems somewhat unlikely that both the ARC measure and the Council measure will get majorities. The ARC will probably be encouraging voters to vote no on the Council measure, because for the ARC, there is so more to gain – and IMO, bad policy to impose – from a majority plus getting more votes than the Council measure than there is to lose from a scenario where both measures fail at the polls. In the latter scenario, the City’s rent control ordinance stays in place (even though a version of it did not get a majority at the polls); the huge rent increases from the time before the ordinance do not prevail, good cause protections are in place, relocation payments, etc.* That’s not really heads I win, tails you lose. I think it’s more like playing with house money.

    Finally, I would say that should the ARC measure prevail, you’ll also have lawsuits about the composition of the Board and ARC charter provisions that would put “landlords” through extra hoops in order to be elected or sit on the Board. (Btw, the definition of “landlord” under the ARC measure appears that it might include a tenant would regularly collects contributions from a roommate towards the rent).

    * Sure, if both measures fail, it might arguably register as a rejection of rent control, but you could also argue that if the votes for the ARC measure + votes for the Council measure reaches a certain level, it is not a rejection of at least some form of rent control. That argument might even be made where a portion of the votes for the City Council measure are composed of votes that prefer no rent control, but prefer the City Council measure as a compromise or second preference to the ARC disaster. All of this seems to recommend taking the language of the ballot measures themselves as evidence of voter intent as to what happens if both measures get a majority, rather than speculating about each voter’s intent.

  5. MP says:

    I thought I was going to reply to a comment by Mr. Foreman about the so-called fixed term loophole and whether it would be plugged by the ARC initiative. I don’t see Mr. Foreman’s comment anymore, but here is my comment about whether the loophole actually exists under the current City Ordinance

    I took a look at the City Ordinance Section 6-58.140 “Evictions and Terminations of Tenancies”. It sets forth various grounds on which a tenancy may be terminated. The part of that section that seems to deal with terminating a tenancy for a “breach” of the lease, Subsection C, appears to preclude an eviction on the basis of the simple expiration of a lease term (meaning the duration of the lease). Subsection C provides a ground for eviction where the tenant, after notice, continues to commit a “material and substantial” breach of an obligation or covenant of the tenancy “OTHER THAN the obligation to surrender possession upon proper notice”. I read that as eliminating the failure to surrender a unit, which otherwise may be an obligation or covenant of a “fixed term” tenancy*, as a ground for eviction. I just don’t see the loophole under the City Ordinance. Please help me out.

    (*Say, for example, by means of a lease provision that says the tenant must vacate at the end of one year, after which both would have the option to negotiate a new lease)

    • MP says:

      The ARC initiative appears to have the same language at Sec 5 (a)(2):

      “The tenant has continued, after written notice to cease, to substantially violate any of the material terms of the rental agreement, EXCEPT the obligation to surrender possession on proper notice as required by law….”

      So, if the City Ordinance has a loophole, how does ARC initiative fix it?

  6. RJS says:

    Be a little careful here, as the natural ending of a term lease is not legally considered a Termination of Tenancy – so it should not rightly be considered as an issue to be covered by Section 6-58.140 Evictions and Terminations of Tenancies:

    From: http://www.tenantsunion.org/en/rights/termination-of-tenancy1

    “A termination (of tenancy) is the landlord ending the rental agreement and asking the tenant to vacate the rental unit.”

    “Tenants on term leases for specific time periods are expected to vacate the unit at the end of the lease, unless the tenancy is explicitly extended in the lease or in written agreement with the landlord. If the lease does not go month-to-month automatically or is otherwise extended the landlord does not need to give notice for you to move out at the end of the lease term, even under the Just Cause ordinance.”

    This wording implies that a fixed term lease does not fall within the Termination of Tenancy domain, but is more rightly considered to be the natural end of an agreed-upon rental period – and the provisions of Ordinance 3148 for compensation due to the tenant for unexpected moving costs do not apply.

    Now – is this a ‘loophole’?
    Depends, I think, on the individual perspective. But – from a strictly legal view – it is neither defined within nor covered by Ordinance 3148.

  7. Steve Gerstle says:

    The only purpose I see for the council putting the ordinance on the ballot is to use it to attempt to defeat the ARC measure. The council’s ordinance is already law and will be even if both rent measures are voted down. If the council wants to defeat the ARC measure in order to preserve its own ordinance, then why not just campaign against the ARC measure — or is that what they are trying to avoid? And is that a legitimate reason to put a measure on the ballot? Perhaps the council is too deeply invested in its own ordinance after the many long nights in council chambers?

    The council measure may not only be flawed legally, but also politically. The council measure essentially becomes a referendum on the incumbents and the focus of the campaign. I don’t know if that is what they want, but they may be so deeply invested in it that they can’t let go. In the “Heads I win, tails you lose” scenario, the only way to win is to take your business elsewhere. It is the council’s ordinance, so the only way to defeat it is to defeat the council. The incumbents now have to defend their ordinance — they voted for it — while the challengers seeking their seats have nothing to gain by supporting it. Also, putting a tax increase measure on the ballot at the same time as a rent control measure seems politically tone deaf. Many people are struggling to pay for basics and to ask for more tax money in this election cycle does not seem like a good move.

    Perhaps there is a logic to what the council is doing, but I don’t see it.

    • David says:

      This has been covered and explained countless times. I think Ashcraft even addressed it on Tuesday night, and she voted against putting it on the ballot. Or perhaps it was Oddie who also voted against.

      There’s value to voters to be able to see and evaluate both measures on equal footing, so they can make an informed decision.

  8. MP says:

    Caution is always advised. And perhaps an action to remove a hold-over tenant (one who stays past a fixed term without consent) is not a prohibited action to terminate a tenancy under the City ordinance (even if it is achieved by a court action to recover possession) where the original fixed term tenancy has already ended by its own terms. Likewise, a hold-over tenancy may not really be a type of tenancy at all.

    If I’m wrong about the non-existence of the loophole, and I may be, the next question is how does the ARC initiative fix this? If it is a problem under the Ordinance, doesn’t the same problem exist under the ARC initiative? It seems to use the same language. Both talk about prohibitions on actions to terminate “any tenancy”. If the City ordinance does not prohibit actions to terminate a holdover tenancy, how would the ARC initiative do that? If it is a loophole, wouldn’t the ARC initiative just make it permanent? Maybe the proposed Rent Control Board could use its powers to write regulations to write the “loophole” written into the proposed Charter provision on the ballot right back out again.

  9. MP says:

    Here is a part of the proposed Council ballot referral I do not understand: “If a majority of the voters vote in favor of this City Council-sponsored measure and also in favor of the other measure or measures, but this City Council-sponsored measure receives fewer votes than the other measure or measures, only those provisions of the other measure or measures that are in direct and irreconcilable conflict with the provisions of this measure shall control, and all other provisions of this City Council sponsored measure shall become valid and binding. The voters expressly declare this to be their intent, regardless of any contrary language in any other ballot measure or measures.”

    If the City measure and the ARC measure both pass, but the ARC measure gets more votes, how would the City measure govern or supply any interpretation — as it purports to do — as to the effect of the “superseding” language in the ARC initiative? The ARC initiative says that it supersedes City ordinances in the areas of rents or evictions. If the Council measure gets fewer votes, what is the basis for it governing what the ARC initiative means by “shall supersede” (i.e. everything concerning rents and evictions, or only those rent and eviction provisions that directly conflict with City ordinances). I might just be like a minority report: interesting reading, but without effect. It would seem like that if the ARC initiative prevails and gets more votes than a Council backed measure, you would look to the ARC initiative itself, and only the ARC initiative, to determine what it means by “shall supersede” ordinances affecting rents or evictions.

    I suppose it is part of an effort to preserve the RRAC for units not covered by the ARC initiative in the event the ARC measure wins because there is also funky language later in the Council measure that would temporarily suspend current law governing the RRAC if the Council measures wins, but that then lifts the suspension in the event the ARC measure gets more votes. The language in the Council measure that purports to interpret what the ARC initiative means by “shall supersede” would then come in to rescue the un-suspended RRAC ordinance to the extent that it does not directly conflict with the ARC initiative (i.e. with respect to units not covered by the ARC initiative). Very funky. Maybe it all depends on whether the votes on one measure are tallied before the other.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s